Australia central bank keeps rates on hold

Australia's central bank held interest rates at their record 2.5% low Tuesday, saying the effects of earlier cuts had still to be fully felt.

The Reserve Bank of Australia kept rates on pause for a fourth consecutive month, as widely expected, after a series of cuts designed to stimulate the economy as its decade-long Asia mining boom cools.

Governor Glenn Stevens said the board judged "that the setting of monetary policy remained appropriate".

"The easing in monetary policy that has already occurred since late 2011 has supported interest-sensitive spending and asset values," he said.

"The full effects of these decisions are still coming through, and will be for a while yet."

The bank considered the economy to be growing "a bit below trend over the past year" while the unemployment rate has edged higher.

"This is likely to persist in the near term, as the economy adjusts to lower levels of mining investment," Stevens said.

"Further ahead, private demand outside the mining sector is expected to increase at a faster pace, though considerable uncertainty surrounds this outlook."

He added that there had been an improvement in indicators of household and business sentiment recently, "but it is still unclear how persistent this will be".

The Australian dollar fell to a two-day low of 90.68 US cents after the comments, with the bank warning the currency was still "uncomfortably high".

"A lower level of the exchange rate is likely to be needed to achieve balanced growth in the economy," Stevens said.